User3 requires a user account in Azure AD.
Note: Your Azure AD password is considered an authentication method. It is the one method that cannot be disabled.
Reference:
https://docs.microsoft.com/en-us/azure/active-directory/authentication/concept-authentication-methods

https://docs.microsoft.com/en-us/azure/role-based-access-control/tutorial-custom-role-powershell Get-AzRoleDefinition -Name "Reader" | ConvertTo-Json
https://docs.microsoft.com/en-us/powershell/module/az.resources/get-azroledefinition?view=azps-5.9.0
https://docs.microsoft.com/en-us/azure/role-based-access-control/tutorial-custom-role-powershell
https://docs.microsoft.com/en-us/powershell/module/microsoft.powershell.utility/convertto-json?view=powershell-7.1
https://docs.microsoft.com/en-us/powershell/module/azuread/get-azureaddirectoryrole?view=azureadps-2.0
Topic 3, Contoso Ltd
Existing Environment
Currently, Contoso uses multiple types of servers for business operations, including the following:
File servers
Domain controllers
Microsoft SQL Server servers
Your network contains an Active Directory forest named contoso.com. All servers and client computers are joined to Active Directory.
You have a public-facing application named App1. App1 is comprised of the following three tiers:
A SQL database
A web front end
A processing middle tier
Each tier is comprised of five virtual machines. Users access the web front end by using HTTPS only.
Requirements
Planned Changes
Contoso plans to implement the following changes to the infrastructure:
Move all the tiers of App1 to Azure.
Move the existing product blueprint files to Azure Blob storage.
Create a hybrid directory to support an upcoming Microsoft Office 365 migration project.
Technical Requirements
Contoso must meet the following technical requirements:
Move all the virtual machines for App1 to Azure.
Minimize the number of open ports between the App1 tiers.
Ensure that all the virtual machines for App1 are protected by backups.
Copy the blueprint files to Azure over the Internet.
Ensure that the blueprint files are stored in the archive storage tier.
Ensure that partner access to the blueprint files is secured and temporary.
Prevent user passwords or hashes of passwords from being stored in Azure.
Use unmanaged standard storage for the hard disks of the virtual machines.
Ensure that when users join devices to Azure Active Directory (Azure AD), the users use a mobile phone to verify their identity.
Minimize administrative effort whenever possible.
User Requirements
Contoso identifies the following requirements for users:
Ensure that only users who are part of a group named Pilot can join devices to Azure AD.
Designate a new user named Admin1 as the service administrator of the Azure subscription.
Admin1 must receive email alerts regarding service outages.
Ensure that a new user named User3 can create network objects for the Azure subscription.